Ohio Senate takes steps to marry state, federal tax codes
(The Center Square) – Business owners and farmers will receive a two-year extension on losses for tax purposes after the Ohio Senate took the first step in consolidating federal and state tax law.
The Senate recently passed a bill that incorporates changes to the Internal Revenue Code into Ohio law that sponsor Sen. Louis W. Blessing III, R-Colerain Township, says will simplify state tax filings for some people and businesses.
The federal tax law changes were part of the Inflation Reduction Act of 2022 and the Consolidated Appropriations Act.
“Most people are probably not aware that changes to federal tax law do not become part of Ohio law unless we pass legislation incorporating those changes,” Blessing said. “In this case, the legislation will prevent some Ohio taxpayers from having to file one amount of taxable income on federal returns and a different amount for state returns.”
Senate Bill 10, which now heads to the House, would extend limitations on excess business and farm loss from Jan. 1, 2027, to Jan. 1, 2029. It would also increase the current maximum deduction per square foot for energy efficient commercial buildings. Those changes were part of the Inflation Reduction Act.
The Consolidated Appropriations Act authorized tax-free rollovers of up to $35,000 from 529 education savings plans to Roth IRAs; $1,000 withdrawals from tax-preferred retirement plans for certain emergency expenses without a 10% penalty; requires automatic enrollment and yearly escalation of employee contributions into retirement plans and increases the age of the required beginning date for mandatory retirement account distributions from 72 to 73 this year and to 75 in 2033.
Blessing also said the changes affect the tax base of school districts that levy an income tax on the basis of federal adjusted gross income.
